On the first day of the Global Fintech Fest (GFF) 2025, themed ‘Empowering Finance for a Better World Powered by AI,’ the Boston Consulting Group (BCG) released its flagship report for the event, titled ‘Convergence: Human + AI for the Next Era of Finance’.

The report arrives during a period when the world is experiencing an Artificial Intelligence supercycle, with over $1.3 trillion invested globally in the last five years—four times more than in fintech. Adoption has been remarkable, with mainstream GenAI tools reaching approximately 40% penetration within two years among working-age populations, a milestone that took the internet five years to accomplish.

AI’s impact will extend beyond large institutions. AI has the potential to bring a transformative effect to everyone’s lives. It can serve as an enabler for 'Convenience in Daily Life' and 'Convenience in Business Operations’. The report foresees AI-powered applications such as JanArth.AI and VyaparSaathi.AI, which can revolutionize personal finance management for households and function as a virtual CFO for small businesses.

Yashraj Erande, the Global Head of Fintech and India Head of Financial Institutions at BCG, added, “India is at a defining moment. On one hand, Indian Fintechs have demonstrated 35% growth in the last 2 years and are on track to reach $190 billion by 2030. On the other, AI is rewriting the rules of competitiveness globally and has reignited innovation as a top CXO priority for Indian fintechs. The good news for India is that it is uniquely positioned on three fronts: as the world’s largest AI consumer market, a global AI use-case playground, and a leading execution hub exporting technology solutions worldwide. India has both scale and execution muscle, and the government has stepped up decisively with the IndiaAI Mission.”

Realising the full potential of the AI opportunity will hinge on India executing across the entire AI stack. The report summarises it as follows:

1. Infrastructure: Enable at Global Scale, Anchor at Home

Data centers: India faces the “2–20 conundrum” as it generates nearly 20% of the world’s data but possesses just 2% of global data center capacity. To bridge this gap, India should aim for at least an 8% share (around 17 GW) of global capacity by 2030, which will require extensive real estate and sustainable energy.

Compute: A two-speed strategy is critical for India - strengthen global partnerships, while simultaneously investing in indigenous GPU design

2. Data: Build the world’s richest ethical data commons - India must continue to grow and expand AIKosh, the national datasets platform, to serve the unique model-building needs of India and other emerging economies.

3. Models: Develop Purpose-Built AI for Bharat and the Global South - India should focus on domain-specific, large-scale AI models in sectors like healthcare, agriculture, education, and financial inclusion. These models need to be tailored to the specific needs of the Global South, incorporating multilingual and multimodal features that operate smoothly across diverse populations, especially in Tier-2+ cities and rural areas.

4. Capital: Unlock over ₹10 Lakh Crore for AI innovation—patient capital will be essential for India’s AI growth. Facilitating M&A exits should be a priority, as global tech giants have expanded largely through acquisitions (the top seven US tech firms encompass approximately 1,000 companies via M&A). Tapping into existing domestic pools like insurance and pension funds (EPFO), along with private equity, venture capital, and family offices, can help mobilize capital for AI. Policy should structurally incentivize high-net-worth individuals (HNIs) and private sector players to channel long-term investments into AI.

5. Talent: Transform India into the Global AI Hub - India could become a leading AI center by enhancing research excellence, retaining talent, and expanding skilling programs.

6. Applications: Capture a Significant Share of Global AI Revenues - With its unique approach across the AI stack, India is well-placed to take a substantial portion of the global AI software and services market. By 2028, this market is expected to reach $100–120 billion in revenues, accounting for approximately 50% of India’s current IT services market, per the report.

"We are witnessing the AI hype cycle, marked by big deployment announcements, high investments, a race for tech supremacy, politics, and more, yet only 27% of companies realise true value from AI globally," said Erande.

The real question is, how do we see value from AI? The report presents a 10-point plan for BFSI in India to realize benefits from AI at scale, focusing on how the industry can move beyond pilots to create value. It emphasizes that responsible and inclusive AI adoption will be crucial for maintaining this value, ensuring fairness, transparency, and trust as AI becomes deeply integrated into financial systems.

AI has re-established innovation as a top priority for CXOs, with nine out of ten leaders emphasising its importance and one in four planning to increase AI budgets by over 60% in the next two years. However, challenges remain, including the lack of coherent strategies and gaps in talent, data, and infrastructure. Leaders highlight the need to move beyond pilots and adopt UPI-style open innovation to fully realise AI’s potential in finance, according to the report.